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Informist, Tuesday, Apr. 8, 2025

 

--Oil secy: Expect INR-320-bln revenue from petrol, diesel excise duty hike 

 

By Priyasmita Dutta and Anand Chandrashekhar    

NEW DELHI - The government is expected to collect about INR 320 billion from the INR 2 hike in excise duty on petrol and diesel effective Tuesday, and this fund will be used to compensate oil marketing companies for the losses incurred in 2024-25 (Apr-Mar) to the tune of over INR 410 billion, Ministry of Petroleum and Natural Gas Secretary Pankaj Jain said Tuesday. 

 

"The collection from the extra 2 rupees excise duty will go to the Consolidated Fund of India, and from there, the finance ministry will approve the transfer to OMCs for their losses in FY25," Jain told Informist. The oil ministry will reach out to the finance ministry at an appropriate time to facilitate the transfer, Jain added.

Besides the hike in excise duty, the government also announced a hike of INR 50 hike in the prices of liquified petroleum gas cylinders. This will also lead to considerable collection, which will help in plugging the losses incurred by the oil marketing companies on the subsidised Ujjwala cylinder prices, he said.

 

Further, Jain explained that this move will prove to be doubly beneficial for oil marketing companies as the hike in retail cylinder prices will compensate for some losses. Following the hike, a standard 14.2-kilogram LPG cylinder will now cost INR 553 for Ujjwala scheme beneficiaries and INR 853 for other customers in Delhi.

Launched in 2016, under the Pradhan Mantri Ujjwala Yojana, subsidised cooking gas connections are given to families that are below the poverty line.

While this is not a direct compensation from the government for the losses of oil marketing companies, the last such compensation was granted by the Union Cabinet in October 2022, when the centre announced a payment of INR 220 billion for state-run oil companies' cumulative loss of INR 280 billion.  End

 

Edited by Akul Nishant Akhoury

 

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